General Motors and Honda are taking their relationship to the next level — in North America, at least.
The two automakers have been working together on several fronts for some time now, an under the terms of a new memorandum of understanding, they’ll seek to pair up in even more areas hoping to reduce costs and accelerate vehicle and technology development.
Engineering, purchasing, services and other areas of the business would be open to partnership under the new deal, although the goal is save money and improve products while maintaining each company’s individual identity.
“This alliance will help both companies accelerate investment in future mobility innovation by freeing up additional resources. Given our strong track record of collaboration, the companies would realize significant synergies in the development of today’s vehicle portfolio,” said Mark Reuss, president of General Motors, in a statement.
The two sides already agreed in April to jointly develop two all-new electric vehicles for Honda based on GM’s global EV platform powered by its Ultium battery technology. GM and Honda have worked together on and off for more than two decades ago, but the two sides have been joining up more and more in recent months.
In addition to the April agreement, there are partnerships on fuel cells, batteries and the Cruise Origin shared autonomous vehicle. Neither side applied a dollar amount they expected to save with this new, broader arrangement.
“Through this new alliance with GM, we can achieve substantial cost efficiencies in North America that will enable us to invest in future mobility technology, while maintaining our own distinct and competitive product offerings,” said Seiji Kuraishi, executive vice president of Honda Motor Co. Ltd.
“Combining the strengths of each company, and by carefully determining what we will do on our own and what we will do in collaboration, we will strive to build a win-win relationship to create new value for our customers. In this way, Honda will continue making steady progress in solidifying our existing business by realizing strong products, strong manufacturing capability and a strong business structure.”
The area where this new partnership can pay big dividends quickly is in the development of new technology. In an industry that is becoming more technologically advance at a quicker rate than ever, the two sides “would explore combining the R&D efforts between the two companies related to advanced technology areas, including electrical architecture, advanced driver assist systems, infotainment, connectivity and vehicle-to-everything communication,” they noted in a release.
The move to work with a strong partner isn’t new to GM and Honda, it’s becoming the standard for automakers around the world. Ford and Volkswagen have an expansive agreement to work together in a variety of areas such as electric vehicle development, truck and commercial vans and autonomous vehicle technology.
Fiat Chrysler is in the midst of a formal partnership with French automaker PSA Group. Their goals mirror much of what the other two marriages bring together: reduced costs, improved vehicle and technological development and financial strength.
The new Honda-GM pact not only offers the opportunity to partner up in areas to collect low-hanging financial fruit, it could result in growing their comfort level with each other, so they begin to explore other areas, such as building vehicles for one another in certain markets. The new effort will be managed by a joint committee of leaders from both companies.